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Fenderstratguy t1_jegpvn4 wrote

Reply to comment by unnaturalgenius in financial education advice by [deleted]

If you go the crypto/options/daytrading route - I've heard many many wise people (how have learned from experience) to limit your fun money or gambling portion of your portfolio to no more than 5% of your portfolio. This is because the odds are stacked against you for coming out ahead.

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micha8st t1_jegrzvx wrote

Think about this for a minute.

Investing vs. Gambling.

I only invest. And I even call some of my investing "gambling".

Options are buying a bet on where a stock will be trading on a certain day. That's gambling.

crypto is just another form of currency trading. And you're trading currency that's not backed by any government. That's also gambling.

In general, real estate always goes up. There are exceptions. Slums in particular.

In general, the stock market always goes up. Again, there are exceptions. Look at GE. It's been beaten up and is being broken apart.

So I invest in mutual funds. Inside a mutual fund, GE stinks just as bad as outside, but its effect is tempered by the 99 other stocks the mutual fund has bought.

I have a brokerage account where I hold maybe 50 stocks. Some of them I bought. Some I was given. Some are decendents of what I bought. I bought GE, and out spun GE Healthcare and Wabtec. I was given AT&T, and out spun Warner Brothers Discover and Lucent and a few others. Stock are fun and interesting, but certainly NOT for serious wealth building.

I also bought BP 3 months before the Deepwater Horizon Disaster. It's never recovered.

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unnaturalgenius t1_jegu91t wrote

I understand, everything comes with risk. Currently investing in VOO and SCHD. What would you recommend for serious wealth building? besides real state.

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unnaturalgenius t1_jegt8xe wrote

5% is a small but efficient amount to practice and learn trading. Would keep that in mind.

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